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Coronavirus – FCA and PRA guidance on designating key financial workers – UK

  • United Kingdom
  • Coronavirus - Workforce issues
  • Financial services disputes and investigations
  • Litigation and dispute management
  • Financial services

24-03-2020

In response to Government guidance on maintaining educational provision for the children of key workers, the FCA and PRA have published guidance regarding individuals in the financial services sector who are needed for the provision of essential financial services during the coronavirus (Covid-19) outbreak (key financial workers).  The guidance is relevant to dual-regulated firms, FCA solo-regulated firms, and operators of financial market infrastructure.

A key financial worker is someone who fulfils a role that is necessary for the firm to continue to provide essential daily financial services to consumers, or to ensure the continued functioning of markets.  The FCA and PRA expect a limited number of people to be identified as key financial workers.

What should firms do?

To determine which staff are key financial workers, firms should identify:

  • first, the activities, services or operations which are likely to lead to the disruption of essential services to the real economy or financial stability
  • second, the individuals who are essential to support those functions
  • third, any critical outsource partners, including non-financial services firms, that are essential to the continued provision of services

Firms must implement a process to ensure that only those roles meeting the definition are designated as key financial workers.  The regulators recommend that the SMF1 (Chief Executive Officer) should be accountable for the adequacy of this process.  For firms that do not have an SMF1, accountability should rest with the most relevant member of the senior management team.

Firms should consider whether to issue a letter to the individuals they designate as key financial workers, for presentation to schools on request.  The FCA and PRA recommend that the letter is signed by someone with appropriate authority and includes the sentence “the individual has been designated as a key financial worker in relation to their employment by [firm name]”.

Which services are essential?

The types of roles that may be considered as providing essential services, thereby meeting the definition of key financial worker, include individuals essential to:

  • the overall management of the firm (including individuals captured by the Senior Managers Regime)
  • the running of online services and processing
  • the running of branches and the provision of essential customer services (e.g. dealing with consumer queries (including via call centres), client money and client assets, and maintaining access to cash and other payment services)
  • the functioning of payments processing and cash distribution services
  • facilitating corporate and retail lending and administering debt repayment
  • the processing of insurance claims and renewals
  • the operation of trading venues and other elements critical to market infrastructure

Other roles that may be considered as providing essential services are risk management, compliance, audit and other functions necessary to ensure the firm meets its customers’ needs and its obligations under the regulatory system.

Further, any individual who provides essential support to enable the functioning of the roles described above, such as finance and IT staff, may also be considered a key financial worker.